All Posts (10732)
Sort by
Presented by Nick Santiago May 06, 2013 10:38AM
If you are a day trader, swing trader, or long term investor it is important to understand relative strength. Relative strength is the strength of an equity compared to the major stock indexes. This reading will help you tell if a stock can trade sharply higher or lower in the time frame that the equity is being viewed.
Here is an example; if you were a day trader this morning and you see the PowerShares QQQ Trust (NASDAQ:QQQ) trading higher on the session. But a stock such as Netflix Inc (NASDAQ:NFLX) is trading lower by 2.0 percent, then it is safe to say that NFLX stock is showing weak relative strength on the intra-day charts. When traders see a stock that has weak relative strength compared to the QQQ, then it is important to note that if the QQQ starts to decline intra-day that particular stock with weak relative strength is likely to trade much lower. Stocks that have weak relative strength are already signaling to the trader that they do not have institutional sponsorship in the near term.
Lets take a look at another example. Today, the PowerShares QQQ Trust (NASDAQ:QQQ) is trading higher by $0.22 cents a share. This is not a big move higher, however, the QQQ is making new 52 week highs on the daily chart. Then you have stocks such as Amazon.com (NASDAQ:AMZN), and Baidu Inc (NASDAQ:BIDU) trading sharply below their daily chart highs, this tells us that these stocks are signaling weak relative strength on the daily charts. Should the QQQ top out then it would be prudent to expect stocks such as AMZN, and BIDU to trade lower and lead the declines in the market.
Relative strength also works in the opposite way when an equity signals strength. At this time, Cree Inc (NASDAQ:CREE) has been a stock that is signaling strong relative strength. Should the QQQ trade higher we would expect CREE to trade higher along with the QQQ. Today, CREE stock is trading higher by 2.65 percent, meanwhile, the QQQ is only trading higher by 0.36 percent. In other words, CREE stock has strong relative strength in the market. Individuals will be better served by using relative strength when trading in the stock market.
Nicholas Santiago
www.inthemoneystocks.com
Here is an example; if you were a day trader this morning and you see the PowerShares QQQ Trust (NASDAQ:QQQ) trading higher on the session. But a stock such as Netflix Inc (NASDAQ:NFLX) is trading lower by 2.0 percent, then it is safe to say that NFLX stock is showing weak relative strength on the intra-day charts. When traders see a stock that has weak relative strength compared to the QQQ, then it is important to note that if the QQQ starts to decline intra-day that particular stock with weak relative strength is likely to trade much lower. Stocks that have weak relative strength are already signaling to the trader that they do not have institutional sponsorship in the near term.
Lets take a look at another example. Today, the PowerShares QQQ Trust (NASDAQ:QQQ) is trading higher by $0.22 cents a share. This is not a big move higher, however, the QQQ is making new 52 week highs on the daily chart. Then you have stocks such as Amazon.com (NASDAQ:AMZN), and Baidu Inc (NASDAQ:BIDU) trading sharply below their daily chart highs, this tells us that these stocks are signaling weak relative strength on the daily charts. Should the QQQ top out then it would be prudent to expect stocks such as AMZN, and BIDU to trade lower and lead the declines in the market.
Relative strength also works in the opposite way when an equity signals strength. At this time, Cree Inc (NASDAQ:CREE) has been a stock that is signaling strong relative strength. Should the QQQ trade higher we would expect CREE to trade higher along with the QQQ. Today, CREE stock is trading higher by 2.65 percent, meanwhile, the QQQ is only trading higher by 0.36 percent. In other words, CREE stock has strong relative strength in the market. Individuals will be better served by using relative strength when trading in the stock market.
Nicholas Santiago
www.inthemoneystocks.com
Presented by Nick Santiago May 03, 2013 10:45AM
Everyone knows that asset prices are being supported by central bank money printing called quantitative easing. Central banks such as the Federal Reserve (FRB), Bank of England (BOE), and now the Bank of Japan (BOJ) are printing money at unprecedented levels. When a country can buy its own debt from money created out of thin air, that money will then go into stocks and inflate the equity markets.
The NIKKEI 225 (Japan) has been surging higher since the country started to devalue its own currency. The Japanese Yen has plummeted against the U.S. Dollar and this has been the catalyst to boost asset prices in Japan. Leading Japanese ADR's such as Toyota Motor Corp (ADR) (NYSE:TM), and Honda Motor Co. Ltd. ADR (NYSE:HMC) are now trading at new 52 week highs because of this central bank action.
A weak currency will help to boost exports for Japan as their products become cheaper for countries with a strong currency. The downside to this money printing is inflation, but at this time the central banks around the world say there is very little inflation. The cure for inflation when it comes will be to stop printing money and raise interest rates. Unfortunately, history has shown that most central banks around the world will create a massive bubble before they start to withdraw the easy money policies. We shall see if it is different this time.
The Bank of Japan has stated that they will implement monthly bond purchases in the amount of 7.5 trillion yen (US$78 billion) per month in an attempt to increase inflation to two percent within the next two years. Currently, the United States is buying $85 billion worth bonds every month. It is important to note that Japan's economy is one third of the size as the United States. So it is safe to say, Japan has the printing presses on turbo at this time. Traders and investors should watch the NIKKEI 225 Index for near term chart resistance around the 14,000 level. There will also be important chart resistance around the 15,000, and 15,470 levels should the index trade higher.
Nicholas Santiago
www.InTheMoneyStocks.com
The NIKKEI 225 (Japan) has been surging higher since the country started to devalue its own currency. The Japanese Yen has plummeted against the U.S. Dollar and this has been the catalyst to boost asset prices in Japan. Leading Japanese ADR's such as Toyota Motor Corp (ADR) (NYSE:TM), and Honda Motor Co. Ltd. ADR (NYSE:HMC) are now trading at new 52 week highs because of this central bank action.
A weak currency will help to boost exports for Japan as their products become cheaper for countries with a strong currency. The downside to this money printing is inflation, but at this time the central banks around the world say there is very little inflation. The cure for inflation when it comes will be to stop printing money and raise interest rates. Unfortunately, history has shown that most central banks around the world will create a massive bubble before they start to withdraw the easy money policies. We shall see if it is different this time.
The Bank of Japan has stated that they will implement monthly bond purchases in the amount of 7.5 trillion yen (US$78 billion) per month in an attempt to increase inflation to two percent within the next two years. Currently, the United States is buying $85 billion worth bonds every month. It is important to note that Japan's economy is one third of the size as the United States. So it is safe to say, Japan has the printing presses on turbo at this time. Traders and investors should watch the NIKKEI 225 Index for near term chart resistance around the 14,000 level. There will also be important chart resistance around the 15,000, and 15,470 levels should the index trade higher.
Nicholas Santiago
www.InTheMoneyStocks.com
